2013 Retailer of the Year: Kroger Co.

This grocery superstar surpassed $1 billion in annual wine sales in 2012 and expects to post double-digit growth this year.

By Virginie Boone

Allan Cook

The Kroger Co.’s modest beginnings date back to 1883, when founder Barney Kroger invested $372 to open a grocery store in downtown Cincinnati. His motto was, “Be particular, never sell anything you would not want yourself.”

From the beginning, his staples were an in-house bakery and a meat and seafood shop, making him the first to sell meats and groceries under one roof. The stores now typically offer more than 50,000 items, ranging from organic vegetables to hot meals.

With more than 2,400 stores in 31 states, Kroger sold over $1 billion in wine in 2012, a double-digit increase in sales over 2011. Wine grew in all price segments, with the majority from premium wines between $8 and $12.

Kroger sells wine in only 1,919 of its stores in 28 states. It’s trying to increase that number by getting involved in initiatives like Red, White and Food in Tennessee, which seeks to legalize wine sales in the state’s food stores.

With total annual sales of approximately $96 billion, Kroger is one of the largest retailers in the U.S. It operates 18 different divisions, including Ralph’s in California; Fred Meyer, primarily in the Pacific Northwest and Alaska; QFC; Fry’s; Smith’s; Food 4 Less; Dillon’s and Harris Teeter.

Under its “Customer 1st Strategy,” Kroger encourages customer feedback through multiple channels, including through Facebook and Twitter. In 2012, Kroger received responses from nearly 2 million customers.

“We know what’s important in terms of what our customers want,” says Allan Cook, Kroger’s manager of adult beverages. “We vary the assortment in our stores, from an opening price-point item, which would be in all clusters of stores, to our high-end stores, where we have wine stewards. We bring in the wines our customers want to buy, and can accommodate special requests.”

The company’s 450 wine stewards help guide customers in stores and online by providing tasting tips and seasonal recipes.

“Their main purpose is to help with customer selection,” Cook says. “It could be as simple as, ‘Help me find a great tasting Pinot Noir,’ or ‘I’m having a party with ‘X’ amount of people.’ And they can help with selections in other areas of the store.”

Kroger identifies wine as an important category, with plans to grow aggressively over the next five years.

“We’re seeing an increase in sales of sparkling wines more as an everyday occasion than strictly for celebratory purposes, especially among our youngest demographic, and continued growth in red blends,” says Pat Byrne, senior wine category manager.

Kroger believes in giving its customers options from close to home.

“We support, in all of our different areas, local wineries and the places people get to experience when they’re out for a day trip,” Byrne says. “They can repeat the experience in one of our stores and pick up one of those items, and that’s something they really enjoy.”

For its dynamic growth, dedication to wine, ability to foresee trends and customer service, Wine Enthusiast selects Kroger Co. as our 2013 Retailer of the Year.